SILVERBERG 

GOLDMAN & 

B IKO FF, L.L.P. GEORGETOWN PLACE • SUITE 120 • HOI 30TH STREET, NW • WASHINGTON, D.C. 20007 

VOICE (202) 944-3300 • FACSIMILE (202) 944-3306 

ATTORNEYS AT LAW 

Via Hand Delivery 

Ms. Catherine J. O'Toole 

Analyst, Air Carrier Fitness Division 

Office of Aviation Analysis 

Department of Transportation 

1200 New Jersey Avenue 

Washington, D.C. 20590 

Dear Ms. O'Toole: 

December 22, 2010 

o 

cr 

Re: Application of Alaska Central Express, Inc. 

Docket DOT -OST -1996-1657 

I am pleased to respond to your December 17, 2010 letter request for certain 

additional information from Alaska Central Express, Inc. in connection with its 

application for reissuance of its certificate of public convenience and necessity to 

authorize it to engage in scheduled passenger air transportation. Currently, Alaska 

Central is authorized to engage in the transportation of freight and mail and charter 

passenger air transportation. Alaska Central has indicated its intention to commence 

providing scheduled air transportation within the State of Alaska following on from its 

successful efforts to offer charter passenger service throughout the State. Alaska Central 

understands the Department needs certain additional information in order to process 

Alaska Central's application, which, as you know, is unopposed. Alaska Central hereby 

responds to your request and states its intention to commence scheduled passenger 

service as soon as all necessary authority to do so has been gained. Accordingly, Alaska 

Central requests that the DOT move promptly to consider the additional information and 

thereafter rule on Alaska Central's application. 

The numbered responses below correspond to the numbered questions in your 

letter dated December 17,2010. 

1. Alaska Central has not yet negotiated definitive financing terms for an 

additional Beech-1900 aircraft as it does not intend to commence operations with a 

second passenger aircraft until July, 2011. The aircraft will be acquired in June, 2011 

and Alaska Central will begin incurring interest expense for the aircraft in that month. 
Ms. Catherine J. O'Toole 

December 22, 2010 

Page 2 

However, Alaska Central already owns such aircraft and based on its knowledge of the 

market and its existing aircraft financing arrangement, Alaska Central has projected 

monthly interest expense of approximately $6,730 (and depreciation of $9,615) for the 

last seven months in 2011. Recall that Alaska Central already conducts charter passenger 

air transportation and the passenger configured Beech-1900 aircraft used to conduct 

charter flights will also be used to conduct scheduled passenger operations in the first half 

of2011 when demand for passenger service is seasonally low. 

Alaska Central has already identified potential sources for the additional aircraft 

although a definitive letter of intent has not yet been entered into. The forecast monthly 

expense were Alaska Central to lease the aircraft rather than to purchase the aircraft will 

approximate the forecast interest expense plus depreciation as shown in the attached 

profit and loss statement. 

2. Enclosed is a detailed forecast profit and loss statement for the proposed 

scheduled passenger operations of Alaska Central using the same format and assumptions 

used to produce the company's 2011 profit and loss statement, as previously submitted to 

the Department with Alaska Central's application, except that, for further clarity, 

scheduled passenger revenues and related cargo revenues have been broken out 

separately as has the fixed and variable costs associated with the scheduled passenger 

operation. 1 Alaska Central is projecting a first year net profit. 

Total operating cost related to scheduled passenger service for the first 12 months 

of operations are forecast to be $2,518,217 which translates into a normalized quarterly 

operating expense of $629,554. Alaska Central has more than adequate resources to 

cover this sum plus expected pre-operating expenses. Per Attachment 2 of the Alaska 

Central aPFlication, as of September 30, 2010 Alaska Central had cash on hand of almost 

$404,000. In addition, as of September 30, 2010 Alaska Central had assets of 

$10,038,616 and only $4,712,088 in liabilities and because the carrier has been 

consistently profitable, positive retained earnings of over $3.8 million and total equity of 

$5.3 million.3 In other words, Alaska Central is more than able to commence scheduled 

passenger operations without imposing any risk on the traveling public. The risk of 

failure, if any, will be entirely borne by Alaska Central and its stockholder and not the 

traveling or shipping public. 

1 Alaska Central is submitting the requested "stand alone" scheduled passenger forecast 

profit and loss statement under cover of a Rule 12 motion. A redacted version of the 

forecast statement is also being submitted with this letter. 

2 As of December 17, 2010 Alaska Central's cash position stands at $706,000. 

3 See Order 2010-11-05 at page 9 in which the DOT noted affirmatively an applicant 

carrier's favorable current ratio and positive stockholder's equity as evidence of the 

ability of the applicant to engage in new operations without imposing undue risk to the 

public. 
Ms. Catherine J. O'Toole 

December 22,2010 

Page 3 

3. As previously noted, because Alaska Central already provides charter 

passenger service there is no need to initially hire any additional staff to commence 

scheduled passenger operations. Additional staff will be hired as the second aircraft 

comes online and those costs are forecast in the attached profit and loss statement. In this 

regard, Alaska Central has assumed the need to hire six additional pilots and three 

additional staff to conduct scheduled passenger operations during the second half of 

2011. However, these incremental costs will not be incurred in the first half of the year. 

As requested, also enclosed with this letter is the certification of Michael A. 

Bergt, the President of Alaska Central Express, stating that the information being 

provided under cover of this letter and in Alaska Central's application is accurate. 

Finally, please note that Alaska Central has not undergone any substantial change 

in ownership or operations since it filed its application on November 12, 2010. 

Accordingly, and with the requested additional information having been provided, Alaska 

Central hereby respectfully requests that the Department proceed to promptly reissue to 

Alaska Central its certificate of public convenience and necessity authorizing it to engage 

in scheduled passenger air transportation. And as the application of Alaska Central is 

unopposed, the DOT should do by moving directly to the issuance of a Final Order. 

Very truly yours, 

SILVERBERG, GOLDMAN & BIKOFF, LLP 

Attorneys for 

CENT! EXP SS, INC. 

By' Rf;~ Sil~erbe~ =S 

Enclosures 

cc: All Parties on the attached Service List 
SERVICE LIST 

Hugh A. McLaughlin 

Manager, Flight Standards District Office 

Federal Aviation Administration 

300 West 36th Avenue, Suite # 1 0 1 

Anchorage, Alaska 99503 

Ms. Dee Rice 

Principal Operations Inspector 

Federal Aviation Administration 

300 West 36th Avenue, Suite #101 

Anchorage, Alaska 99503 

Marc Luiken 

Deputy Commissioner of Aviation 

Alaska Department of Transportation & Public Facilities 

P.O. Box 112500 

Juneau, AK 99811-2500 
..... ka Cenlrll ~ Inc. 

_pal 

'_a~)11 

, ;1i,1il1\t:';2'\~P'"' 

e_ Jon 

2978<1 

6,667 

339 

6 

1030 

3,72 

112 

3M 

931 

1 

11754 

2 75 

2 06S 

665 

2500 

8-4._ 

- Fob 

78<1 

6 7 

339 

1030 

3723 

112 

354 

931 

1200 

11754 

2275 

2068 

8B5 

500 

8-4.456 

~t 

M .. 

35369 

154 

403 

776 

1223 

4421 

133 

421 

1105 

1425 

13957 

2702 

456 

1028 

2500 

78,073 

- Apr 

31646 

7296 

360 

695 

1~ 

3956 

119 

377 

969 

1275 

12468 

2417 

2196 

919 

2500 

66.328 

Budge' 

May 

- Jun 

-Jul 

-Revenues-

- Operating Expenses -

31646 33507 76322 

7296 7725 17596 

360 381 009 

695 735 1675 

1~ 1159 2639 

3956 4168 9540 

119 126 287 

377 399 90a 

969 1047 2365 

1275 1350 3074 

12466 13223 30 118 

2,417 560 5630 

2196 327 5300 

919 973 865 

2500 2500 2500 

66.328 72.200 15Ul0 

e_ 

Aug 

63768 

19313 

953 

1639 

2 7 

10471 

315 

997 

2616 

3374 

33057 

6399 

5817 

973 

2500 

175,191 

e_ Sept 

81906 

1688< 

932 

1796 

2633 

10238 

308 

975 

2560 

3299 

32322 

6257 

5666 

973 

2500 

171,472 

-Oct 

78183 

16026 

890 

1716 

2704 

9773 

294 

930 

443 

3149 

30 653 

5972 

5429 

665 

2500 

163,728 

-Nov 

81906 

1888< 

932 

1798 

633 

10238 

308 

975 

2560 

3299 

32322 

6257 

5666 

973 

2500 

171.472 

~, 

Doc 

81906 

1888< 

932 

1796 

2633 

10238 

308 

975 

2560 

3299 

32322 

6257 

5666 

973 

2500 

171.472 

Total OF SALES 

$075725 

$155792 Ot~ 

$7 e,g1 0,,", 

:~~!+ C1'Y. 

S2 -M2 0.". 

sa 041 o.~ 

$2111S 01% 

27217 

$268 656 "" 1$'Y. 

$51618 

$46 925 "" 03% 

$11195 \'11% 

13<),000 

$1.427.166 8r.-. 
- Fixed Costs 

-

6800 6800 6768 6735 6702 6670 6637 $47111 ,,% 

SO '0% 9615 9615 9615 9615 9615 9615 $57 6.2 0.3'\. 

436 436 22436 436 22436 22436 $134617 (Lgo", 

1 000 1 000 500 500 500 500 500 500 500 500 500 7000 0.1l'" 

4 3 4643 4 643 4&43 4643 0643 4643 4 &43 4643 4643 5043 sse 118 03'.., 

13125 1301. 12006 12966 12966 12913 13113 13166 13166 13325 13325 $157 173 , ..... 1567 1563 1561 1561 1561 1559 1559 1561 1561 1567 1567 $16756 01'", 

13 13425 13725 13825 13825 13625 13625 13925 13925 13925 13925 51&< 337 '''' 28687 26687 29 816 26 866 28516 28416 28416 28116 28116 28116 28116 $3<42558 ,,% 7499 7399 774;9 8,,,,9 7949 7116 7 216 7 016 6 916 6616 6616 $67541 0$-' .. 

1511 1511 1511 1511 1511 1511 1511 1511 1511 1511 1511 $16127 Q1'4 

I , I 71~27 71.2.47 72.471 72.021 76.271 100.134 108,.02 100.224 109,092 106.924 100.2!ll $1.001.031 11.1'" 

oIaI Opofatlng C .... 

IeIlncome 

.........uv. 
Certification of Alaska Central Express, Inc. 

The contents of the Application of Alaska Central Express, Inc. filed with the 

Department in Docket DOT-OST-1996-1657 on November 12, 2010 and the 

attachments thereto and the forecast profit and loss statement enclosed herewith 

are true and correct to the best of my knowledge and belief. Pursuant to Title 18 

United States Code Section 1001, I, Michael A. Bergt, President of Alaska 

Central Express, Inc., in my individual capacity and as the authorized 

representative of the applicant, have not in any manner knowingly and willfully 

falsified, concealed or failed to disclose any material fact or made any 

false, fictitious, or fraudulent statement or knowingly used any documents which 

contain such statements in connection with the preparation, filing or prosecution 

of the application. I understand that an individual who is found to have violated 

the provisions of 18 U.S.C section 1001 shall be fmed or imprisoned not more than 

five years, or both. 

Dated: December 21, 2010 

Michael A. Bergt 

President 

Alaska Central Express, Inc.